Seattle Times didn't violate antitrust laws, Justice Dept. says

SEATTLE — The Justice Department has closed its antitrust investigation of The Seattle Times, saying that the newspaper did not try to unlawfully monopolize the Seattle market for daily newspapers.

In a decision announced this afternoon, the department said its antitrust division found no evidence that The Times was trying to force the Seattle Post-Intelligencer out of business.

The department "did not find sufficient basis" to conclude that the Times "engaged in improper conduct that is likely to lead to monopolization of the Seattle newspaper market," the agency said.

The Times has been trying to get out of its joint operating agreement with The Hearst Corp., the P-I's parent company, since April 2003, claiming the agreement is no longer profitable because of changes in the market.

Under the 1983 agreement, The Times handles printing, distribution and advertising at both papers in exchange for 60 percent of their joint revenues.

The Justice Department's antitrust division oversees JOAs under the Newspaper Preservation Act, and therefore investigates any proposed changes to such agreements.

The Times said it suffered financial losses under the agreement in three consecutive years — 2000, 2001 and 2002 — thus triggering an 18-month period during which The Times and the P-I could negotiate the P-I's closure.

A three-judge state Court of Appeals panel in 2004 unanimously ruled that The Times had a right to seek an end to the JOA. Hearst appealed, and the case is now before the state Supreme Court.

Hearst has said the P-I lacks staffing and facilities for key business functions and therefore can't survive without the agreement.

Phil Talmadge, co-chairman of the Committee for a Two-Newspaper Town, criticized the decision, saying the Justice Department's scope was too narrow. He said the agency has failed to ensure that Seattle "maintains two vigorously competing newsgathering organizations."

"They took too narrow a viewpoint of what their duty to the public interest was,' Talmadge said.

Kerry Coughlin, a spokeswoman for The Times, was pleased with the Justice Department's decision.

"It's our feeling that this validates what we knew, which is that we did not engage in anticompetitive conduct in management of the JOA relationship," Coughlin said.

Calls to both an attorney and a spokesman for Hearst were not immediately returned this evening.

The Times is owned by the Blethen family with a minority share held by Knight Ridder.

The Justice Department's antitrust division said it did not need to resolve disagreement over whether The Times breached its obligation to support the P-I "because a contract breach by itself would not constitute an antitrust violation."